There are some estate planning objectives that are rather self-evident. Clearly, you want to make sure that your assets get into the hands of your loved ones after you pass away, but there are many different ways to go about it.
You should educate yourself and act in an informed manner when you are making estate planning decisions. With this in mind, we will look at five estate planning issues that everyone should consider in this blog post.
Taxation
There is a federal estate tax that can significantly impact your ability to provide opportunities for your loved ones. You can transfer unlimited assets to your spouse tax-free, but transfers to others are potentially taxable.
This year, the federal estate tax exclusion is $5.43 million. The exclusion is the amount that you can transfer before the estate tax would be applicable.
You should inventory the value of your estate so that you can determine whether or not you are exposed to the estate tax. If you are, there are strategies that can be implemented to ease the burden.
Spendthrift Tendencies
Some people are simply not very good money managers. If you have a spendthrift heir, you should understand the fact that it is possible to include spendthrift protections when you are providing for this person.
Special Needs Planning
Many people with disabilities rely on need-based government benefit programs like Medicaid and Supplemental Security Income. An improvement in financial status can result in a loss of eligibility for these benefits.
This is something you should certainly take into consideration if you have a person with a disability on your inheritance list. You could use a special needs trust to address this type of scenario.
Nursing Home Asset Protection
Most seniors will require nursing home care eventually, it is very expensive, and Medicare does not cover it. If you have to pay out-of-pocket, these costs can consume your resources in a hurry, and there could be nothing left to pass along to your loved ones.
You could respond to this dynamic with the proper planning. Medi-Cal does pay for long-term care, and there are strategies that can be implemented that would lead to eligibility for Medi-Cal coverage while you keep assets in the family.
Incapacity Planning
Many elders become unable to communicate sound decisions at some point in time. If you execute durable powers of attorney, you can name agents who would be able to act for you in the event of your incapacitation.
Schedule a Consultation
After reading about these issues, you may want to take action. Our firm offers consultations, and you can feel free to send us a message through this page to set up an appointment: Sacramento CA Estate Planning Attorneys.
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